Credit card issuers in a new world of their own
The credit card industry seems to have come of age. Until recently, they were aggressive with their marketing and in the bargain not sparing the aged, minors or the family pets. After having undergone huge financial losses which could have well been avoided, the liquidity seems to have reduced.
The credit card accountability, responsibility, and disclosure (CARD) Act (passed into a law – May 22nd, 2009). It covered various aspects such as the interest rates, fees charged, crediting payments, etc and all of this took time in order to be implemented by the card companies. The 22nd of August was the deadline to comply as per the directives.
The card issuers as well as processors have been successful in avoiding any serious deviations with regard to this. Different businesses seem to be adjusting to both the economy as well as the direct repercussions with regard to the earnings in view of the new directives.
But there is still no clarity as to how the new regulations could affect the two major cards such as MasterCard & Visa. There are new fee structures for the signature as well as the PIN and the Fed will have to finalize on the policies as well as the rules with regard to payments.
The other area of discord between the processors as well as the merchants is with regard to the fraud costs and how they could be allocated.
For long Visa and MasterCard has been locked with competition but there is speculation about the entry of newcomers and fresh technology, which could cut the competition between the two major credit card companies.
Ultimately, it is the spending patterns in developed nations that are directly responsible for the business prospects of the two processors. Since the European as well as the US consumer is under a considerable amount of strain, Visa`s growth patterns that have been projected can only be considered as the best case scenario.
Capital One Financial (COF) has long been in the loaning business to individuals. With the directives as per the new act, there are limits on the fee that the company could charge its clients. There is a change with regard to balance payments also. Earlier, when the customers made monthly payments which were over and above the minimum due COF could make decisions on the balances it could apply that payment and would most often pay off the lower rate balances. However, as per the new regulations COF will have to make payments (over the minimum due) to the balance that is the highest, thereby cutting down on the average rates on the carried balances.
Latest Credit Card Issuers News
Wells Fargo & Company has recently announced the release of tap-to-pay contactless consumer credit and debit cards. Wells Fargo cardholders are already familiar with the advantages of digital wallets and are involved in paying for purchases and initiating ATM transactions by means of their mobile phones, while tap-to-pay cards are something new.
Dog-lovers can get checks or credit cards printed with pictures of adorable pups. If you’d rather be at the beach, you can carry a credit card picturing the waves and sand. And now sports fans can order a new credit card with the logo of their favorite teams and players.
Loyal JetBlue customers have another reason to use Chase credit cards: the banking giant and credit card issuer has announced that the JetBlue TrueBlue loyalty program is the newest Chase Ultimate Rewards partner, and cardholders will now be able to redeem their reward points for travel on the airline.
Good news for American Express Platinum cardholders who live or travel in the Denver area: American Express has just announced plans to add a Centurion lounge to the Denver International Airport (DIA). And it will be huge—over 14,000 square feet—making it the second-largest Centurion lounge location.
The Walt Disney Company and Chase Card Services recently announced that they will continue their longstanding relationship, extending their co-branded Disney Visa Card, Disney Premier Visa Card and Disney Visa Debit Card programs in a multi-year agreement.